Shipbuilder backs out of steel project

Vinashin will focus on shipbuilding projects

The move, announced last week, came just days after the investors acquired a 942 hectare plot for developing the project in Van Phong Bay.

“The withdrawal of Vinashin is a very important factor to decide the fate of the project because I think Posco cannot implement the project alone,” said Doan Manh Dung, deputy chairman and general secretary of the Ho Chi Minh City Oceanic Science and Technology Association.

Vinashin previously planned to pour $1 billion into the project. Dung said Posco previously wanted to take on the project alone, but the Vietnamese government did not agree and demanded it take on a domestic partner.
Chu Quang Thu, general director of Vietnam National Maritime Bureau, said he was happy with Vinashin’s move.
“There will be no reasons for Posco to take further steps with this project with Vinashin now out of play,” Thu told Vietnam Investment Review.

Thu said Posco was still waiting for local government consent for the project. Posco executives were not immediately available for comment last week. Vinashin’s board of directors chairman Pham Thanh Binh said it would now concentrate on investing in its core business, large-scale shipbuilding projects.

According to local newspapers, Vinashin is also set to turn its back on 49 other projects worth VND6,500 billion ($406 million) to focus on its core business fields and help rein in inflation. Posco’s plan to build the steel plant received many petitions from scientists and experts.

Dung said Van Phong Bay must be protected to become an international port, products and material distribution and financial centre. “The centre will be foundation for turning the central provinces of Vietnam into a key development area with a good database of marine services,” Dung said.

Forty-metre-deep Van Phong Bay is thought to offer more international port potential than Cam Ranh Bay.
The two-phase Posco factory was planned to produce of 12 million tonnes of steel per year with construction starting in 2009 and finishing in June, 2012.